Despite health challenges, Southern states resist Medicaid expansion

The 51-year-old casino janitor has recurring seizures and recently awoke in an ambulance after passing out at a bus stop.

“It doesn’t hit me suddenly,” White said. “It creeps up on me. I get this feeling like I’m outside of my own body.”

If White had insurance, he’d be under the care of a primary physician and taking medications regularly. But he can’t afford job-based health insurance on his $8-an-hour wage and he earns too much to qualify for Medicaid, the state-federal health plan for poor people and those with disabilities.

So White takes his place in a growing line of uninsured patients outside the Bethel Free Health Clinic on the grounds of a federal housing project in Biloxi, Miss. It’s his off day, so he’s in no rush. He just wants to be one of the dozen or so patients lucky enough to see a doctor.

White is one of 300,000 Mississippians who’d likely qualify for Medicaid next year when the health care overhaul extends coverage to adults who earn up to 138 percent of the federal poverty level. That’s nearly $16,000 a year for an individual in 2013, or roughly $32,500 for a family of four.

But Mississippi and eight other contiguous Southern states, all led by Republican governors, have decided not to implement the Medicaid expansion, even though the federal government has pledged to pay all medical costs for the newly eligible enrollees in 2014, 2015 and 2016 and no less than 90 percent of their costs thereafter.

All of them – Tennessee, North Carolina, South Carolina, Georgia, Alabama, Mississippi, Louisiana, Texas and Oklahoma – say they can’t afford it under those terms.

The wall of Southern opposition is one of the last major obstacles to President Barack Obama’s goal of universal health coverage for all Americans. If it remains intact, nearly 5 million of the newly eligible won’t have Medicaid coverage in 2022, according to estimates by the nonpartisan Kaiser Family Foundation, a health care research group.

Besides shared borders and conservative political leadership, most of the nine states have something else in common: By a host of measures – from obesity to infant mortality – all but North Carolina and Georgia are among the unhealthiest in the nation, according to the 2012 edition of America’s Health Rankings.

Mississippi and Louisiana tie for dead last among all states in the health of its residents, according to the annual report by the United Health Foundation , a nonprofit arm of the insurer UnitedHealth Group. Neither state has finished higher than 48th since the rankings began in 1990.

“Louisiana and Mississippi are obviously the two states in the nation that are facing the most serious socioeconomic challenges, so it’s not hard to understand why they score near the bottom each year,” said Dr. Reed Tuckson, executive vice president and chief of medical affairs at UnitedHealth Group.

Also faring poorly were South Carolina, ranked 46th, and Alabama, which ranked 45th after moving up three spots from 2011. Oklahoma, Texas and Tennessee finished 43rd, 40th and 39th, respectively.

Of the nine Southern states to reject the Medicaid expansion, only North Carolina, at 33rd, and Georgia, at 36th, ranked outside the bottom 12 states.

“You could draw a triangle from Texas to West Virginia to Georgia and in that area, you would have the highest rates of diabetes, obesity and chronic illness in the country,” said Dr. Kenneth Thorpe, a chronic disease expert at Emory University in Atlanta.

Related stories from Columbus Ledger-Enquirer

High poverty typically has dragged down the Southern rankings. So have risky health choices, such as poor diet and smoking. But so can the impact of public policy decisions, such as whether the social benefits of the Medicaid expansion are worth the costs.

A new report by the philanthropic Robert Wood Johnson Foundation finds the nine anti-expansion Southern states among the 21 that would benefit most from broader Medicaid eligibility, based on their higher levels of working poor adults who struggle with medical bills.

"I think it’s very foolish from a health perspective, from an economic perspective, for these states to be turning this down,” said Joan Alker, a co-executive director of the Center for Children and Families at Georgetown University. “It’s playing politics in the worst sense of the word. There are no big interests that are against this. The hospitals are for it. The managed care industry is for it. Most of the employer groups are for it. The opposition is purely ideological. It’s the tea party faction of the Republican Party.”

The nine Southern anti-expansion states aren’t the only opponents. Republican governors in six other states – Maine, Pennsylvania, Michigan, South Dakota, Iowa and Idaho – have said they won’t participate, either, although pressure is mounting for them to reconsider.

The Republican governors of Florida and Arizona already have dropped their opposition.

Some states such as Arkansas, Oklahoma, Tennessee and Nebraska, are inquiring whether health care overhaul dollars may be used to expand private coverage rather than Medicaid.

Still, nearly two-thirds of the 15 governors who oppose bringing more people into Medicaid are in the South, where low-income adults now must earn far below the poverty line to be eligible for the program. In Mississippi, parents with dependent children qualify only if their net income is less than 29 percent of the federal poverty level.

That’s about $6,830 for a family of four.

“From a social or humanitarian perspective, you could argue Medicaid expansion is a winner. But from a purely financial perspective, it’s clearly a loser,” said Charles Blahous, a senior research fellow at the Mercatus Center, a market-oriented research center at George Mason University in Virginia.

Next to education, Medicaid is the largest expenditure for most states, and many Republican governors fear that an expanded Medicaid base would crowd out spending for other vital services.

“I continue to believe that Mississippi should not expand Medicaid because doing so would result in tax increases for hardworking Mississippians or cuts to critical spending in areas like education, public safety and economic development,” Gov. Phil Bryant said in a recent statement.

From 2003 to 2012, Mississippi spent more than $9 billion on Medicaid and the state’s poor health indicators have remained unchanged or worsened, Bryant spokesman Mick Bullock said.

“The data show that throwing money at the issue – money the state does not have – is not working,” Bullock said in an email. “So why would we throw even more money we don’t have at the issue and expect some miraculous change in outcomes?”

In neighboring Louisiana, the state House of Representatives and Senate directed the health department last year to prepare a report on how to move from last in the annual health rankings to 35th within the next 10 years. The March 2013 report said the state "should focus on improving those measures weighted most heavily, such as smoking, obesity and the lack of health insurance.”

He said the expansion would swell Medicaid rolls by 467,000 next year, but 187,000 would be people who dropped private coverage.

Experts say all expansion states probably will see their Medicaid rolls grow as working poor adults stop paying for job-based health coverage when they realize they now qualify for Medicaid. States also will incur additional costs due to a likely enrollment spike among adults who are currently eligible for Medicaid but aren’t signed up.

Overall, Kaiser estimates that if the nine anti-expansion Southern states dropped their opposition, their Medicaid spending would rise 3 to 7 percent from 2013 to 2022. But those spending hikes would be partially offset by savings for hospital indigent care, since more now-uninsured patients would have Medicaid.

Higher state spending on Medicaid also would bring states more than 10 times as many federal dollars, which could bolster the state economy and help create jobs.

By 2022, Kaiser estimates, while Mississippi would spend an additional $1 billion to expand Medicaid coverage, the federal government would pay $14.5 billion of the costs. Other states would enjoy similar windfalls.

Blahous countered that even though the states’ costs are small, “it’s a fiscal push in the wrong direction right at a time when the states can’t very well afford it.”

Medicaid has never been an easy political fit in the South. When the program launched in 1966, states such as Alabama, Florida, Mississippi and North Carolina were among the last to opt in. Critics at the time called it “socialized medicine.”

Over time, as other states used Medicaid waivers and enrollment expansions to cover different groups, such as single adults and childless couples, Southern states largely have chosen to invest in public safety-net hospitals where poor, uninsured patients can get indigent care subsidized by taxpayers.

“But most of the issues Southern states are facing – obesity, diet, lack of exercise, smoking – are things that public hospitals don’t do very well,” Emory’s Thorpe said. “They aren’t designed to provide good primary care and prevention.”

That’s what Medicaid is supposed to do.

It might take a Southern state such as Arkansas, with a Democrat in the governor’s mansion and Republicans controlling the legislature, to make Medicaid expansion palatable in the South and in other pockets of resistance.

Arkansas, which ranked 48th in health outcomes in the United Health Foundation survey, wants to use federal tax credits to pay for private insurance to cover the newly eligible Medicaid population. It would cost the federal government more, but it appeals to Republicans who oppose growing entitlement programs.

The Obama administration supports the general concept, but it’s waiting for Arkansas to finalize its proposal. Others states, such as Florida, Ohio and Louisiana, are watching with interest. Even Mississippi has left the door open.